Winners and Losers From Microsoft's Nokia Acquisition

In technology, "winning isn't everything" is less a maxim and more a warning that the end is near. Microsoft and Nokia were both on a losing streak that could have meant mutual obsolescence until yesterday's announcement that the software giant is buying the primary producer of Windows Phone.

Microsoft CEO Steve Ballmer just recently announced his intention to retire within the year, a decision as necessary for public relations reasons as it was for business reasons. During his tenure the value of the company dropped from more than $600 billion to less than $270 billion. Its flagship Windows product and its Office line have both been devalued in the market by free offerings from Google. Even Microsoft's lone bright spot, the Xbox, hasn't helped it much lately. Ahead of the anticipated November release of the Xbox One, gamers attacked the company for its decision to make all use of the system dependent on Internet connectivity and the motion-sensing Kinect. (The massive gamer backlash saw Microsoft cede both.)

For its part, the Finnish phone maker was once the top in the world but while it still has 18 percent of global market share (second only to Samsung), its smartphone market share has declined to about five percent from nearly 40 percent in 2010. It arguably owes some of those woes to Microsoft; in 2011 it resolved to basically shelve its plans for Symbian and make mostly Windows Phones. Since that decision it's lost about 20 percent of smartphone market share. Financially Nokia was on even shakier ground until Microsoft swooped in. Investors have been judging that Nokia was a bad bet for a while and there were serious questions about how much longer it could keep going on its own.

Microsoft needs a new CEO and it needs a way ahead in mobile—both of which Stephen Elop and the company he just stepped away from provide. While both companies are still far from safe, the deal also puts the spotlight on the fates of other companies, notably Windows Phone makers Samsung and HTC—and BlackBerry.

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